Suppose that in year 1, Jim’s quantity demanded of Pepsi is 7 bottles per week, when the price of Pepsi is $1.75 per bottle and Jim’s income is $60,000. In year 2, Jim’s quantity demanded of Pepsi increases to 14 bottles per week, when the price of each bottle of Pepsi is $1.75 and his income is $75,000. Using the midpoint method, what is Jim’s income elasticity of demand for bottles of Pepsi between year 1 and year 2?
please show work
